Corporate landlords refine plan to squeeze prairie ‘working class folk’


VULTURE LANDLORDS ARE CIRCLING THE WEST. Their eyes are sharply focused on Alberta and Saskatchewan and one kind of prey: essential workers who have to “rent by necessity.”

Jason Jogia, chief investment officer for Avenue Living Real Estate Core Trust explained the company’s strategy this way in a video come on to prospective investors: “What we’ve done is we’ve focused our business and geared towards the essential workers, towards this working class folk. They are what we consider the ‘rent by necessity’ group of Canadians.”

Avenue Living has singled out Alberta and Saskatchewan for this push because neither province has rent controls, he said.

Beware the REITs

Avenue Living operates as a Real Estate Investment Trust (REIT). It is one of Western Canada’s biggest rental companies which owns and operates rental property across Alberta, Saskatchewan and Manitoba. In 2019, former Saskatchewan Party Premier Brad Wall joined Avenue Living as an advisor.

A REIT is a mechanism that turns providing housing into a high finance operation. It allows wealthy investors to make money on their money without doing anything besides buying into the trust, to then receive generous tax breaks on their income in return. Acorn Canada estimates that the federal government lost $1.2 billion to REITs in the last 10 years.

Dr. David Hulchanski says property ownership has become a "hyper-commodity". Hulchanaski is a housing and community development professor at the University of Toronto. He says Avenue Living’s expansion on the prairies is part of the broader trend of housing financialization that has grown across Canada and around the world over the last 25 years.

As a REIT, Avenue Living uses pools of wealthy investor money to buy properties from local “mom and pop” landlords and raise rents to generate returns for those investors, Hulchanski explained to PressProgress.

“There’s almost nothing good in this for renters,” Hulchanski adds.

‘Overqualified' for affordable housing

Avenue Living has carved out a specific niche for themselves. They call it “Workforce Housing.”

A website video explains it this way: “Not to be confused with affordable housing, Workforce Housing caters to a city’s ‘essential workers’ who are overqualified for affordable housing yet may not be able to afford average market-rate homes, whether for rent or purchase.”

“They were the renters by necessity, not the renter by choice. They ultimately were a group of residents that were making $15 to $50 an hour, but could afford to pay rent probably higher than what mom and pop were charging them.”

Jogia touts how investors benefit from this approach with a case study in Regina, Saskatchewan where Avenue Living renovated a building and then increased the rent by 29.2%: “The rents went from $800 – $1050 so we had a pretty sizeable rent increase during that time.”

A comfort to big investors

In the video, Jogia explains that Avenue Living rents to over 25,000 essential workers, primarily through purchasing older “B and C asset class” rental units.

Avenue Living has buildings in the larger prairie cities, but it dominates the market in smaller Alberta towns like Brooks, Wetaskiwin, Camrose, Medicine Hat, Lethbridge, and Swift Current. In Saskatchewan, Avenue Living says it owns 56% of B and C rental units in Lloydminister and Yorkton, 19% in Moose Jaw, and 12% in Prince Albert.

Avenue Living also owns 48,000 acres of Saskatchewan farmland which it rents out to farmers.

“This is gouging, this is taking advantage of the fact that we’re not building many new rental buildings and lower income people need to rent,” says Hulchanski.

“Making really big money in real estate is possible because of government regulations—or lack of regulations—right?”

“That comforts big investors.

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